The government did not discriminate against women when it increased the state pension age for women to equalise it with men, the high court has ruled.
The landmark ruling comes after a high court judge granted a judicial review to determine whether the decision to increase the state pension age for women was lawful.
The case was brought to court by Backto60 a campaign group that represents women born in the 1950s who are now having to wait longer before they become eligible to claim the state pension.
Women previously started to receive the state pension on turning 60. However, since 2010 that age has gradually increased in order to equalise men and women’s state pension ages. State pension age for both sexes is now 65 but will increase to 67 by 2028.
Along with other campaign groups including WASPI (Women Against State Pension Inequality), Backto60 argues that women were not given sufficient warning of the change and are now suffering financial hardship as a result.
It also wants the government to rectify the problem by restoring affected women’s financial position to what it would have been, had the state pension age remained at 60.
As many as four million women have been affected by the increase to state pension age. Many campaigners are not against the equalisation of the state pension, with the grievance focusing on what they regard as the government’s failure to communicate the change which they claim did not give them sufficient time to prepare themselves financially.
The Department for Work and Pension has argued that it did communicate the change and says the increase to state pension age is a necessary result of increasing life expectancy. It has also suggested that the cost of providing the financial redress Backto60 is campaigning for would be prohibitively expensive.
According to figures from Hargreaves Lansdown the cost of reversing both the 1995 and 2011 Pension Acts would be in excess of £200 billion.
Rebecca O’Keeffe, Head of Investment, interactive investor, says: “Pension planning takes decades and most investors have targets and plans, but this case shows that anything can change. We’ve heard some devastating cases, to be published in our Great British Retirement Survey next week, from women who have suffered real hardship as a result of not having sufficient time to plan for these changes – and we’ve heard from spouses too, as any changes can have knock on consequences.
“Changes to life expectancy are already pushing state pension ages up – and changes to government finances may mean that our reliance on the state pension may need to change too. What the case does make clear is that individuals have to take steps to manage their own finances, as early as possible, in order to try and make sure that any future changes can be managed effectively.
“There is no doubt that the state pension is a huge cost to current taxpayers and that a retirement age of 60 is a tough one for the public finances – but there is also no real doubt that the lack of formal personal notices to the 3.8 million women affected meant that many women suffered financial hardship as a result.”
Steven Cameron, pensions director at Aegon adds that he believes there could be amendments made to the way the state pension is paid to alleviate pressure on affected women.
“In an era where private pensions now offer the flexibility to take as much or as little out from as early as age 55, there would be merit in offering not just affected women but everyone regardless of gender the option to take their state pension a few years early subject to it being set at a reduced level to reflect it being paid for longer. While many would argue this doesn’t go far enough to address the hardship a generation of women are facing, it would at least offer more options to choose from,” he says.
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